Tips for Successfully Filing Your Taxes
Tax season is here once again. While many people dread this time of year, you don’t have to. Filing your taxes doesn’t have to be a hassle. These tips and tricks will help ensure filing your taxes goes smoothly this year:
Staying organized is the best thing you can do to make the process of filing your taxes easier. Create a designated place in your house to put any tax related documents as they come in, such as a folder labeled with the year on it. As you receive any tax documents or receipts, put them there right away. This includes papers like the previous year’s tax return, W-2 and 1099 forms, property and real estate documentation, proof of donations, and receipts for deductible expenses (medical, education, business, etc.).
When it’s time to sit down and do your taxes, all you have to do is grab your folder and you will already have everything you need. After you are done, put all of the documentation back into the folder and keep it for at least three years. Having the necessary papers is important if you are audited or there are any questions regarding your taxes later on.
Adjust Your Exemptions and Withholdings
Ideally, you should not owe any money to the IRS when Tax Day comes. In order to accomplish this, you may need to adjust your exemptions and withholdings. Make sure you’re claiming all eligible allowances on your W-4. The IRS provides a withholding calculator to help you determine how many exemptions you should claim. Also, be aware of what money is taxable and what is not. Several types of funds are exempt from taxation in the U.S., including growth and earnings in a Roth IRA, flexible spending accounts or income from 529 education plans.
Contact a Tax Specialist
According to a study by NerdWallet, nearly half of Americans don’t even know what tax bracket they’re in. If you are trying to prepare your taxes on your own, it is likely you are missing out on possible deductions that could save you money. Don’t hesitate to get help from a tax specialist. The amount they can help you save with deductions and credits often outweighs the cost of using their services. Just be sure to contact them early, since they get very busy this time of year.